From Series: Email Marketing Metrics That eCommerce Companies Should be Tracking
There’s no disputing the fact that email continues to be the most effective way to target the largest audience with the least amount of effort and the biggest ROI. Email is one of the most powerful marketing tools at your disposal, and you want to make sure your email channel’s health is up to par.
In our last post we discussed the metrics on the campaign level. Here we will talk about metrics on the channel level, some well known, and others not so well known and less used, though still useful.
First up is bounce rate. Bounce rate measures how many emails never actually made it into your customer’s inbox. Bounces can either be hard or soft. No we aren’t talking about boiling eggs here.
Soft bounces include emails that are rejected for a couple of different reasons. In any case, the email address is most likely valid with a soft bounce Maybe the recipient’s inbox is full, the message is too big, or the server is down. Unfortunately this is something you have no control over and there’s isn’t much that can be done on your end to prevent these soft bounces.
Hard bounces are a different story. Like the name suggests, a hard bounce is a permanent rejection of an email. Messages are permanently denied because the email address is invalid or the server has blocked it from reaching its recipient. Hard bounces also occur for a variety of other reasons. Like a person who shuts down/deletes their email addresses, etc.
To prevent hard bounces make sure you are updating your contacts list regularly. Scan for typos, automatically remove bounced addresses from your list. Also, most ESP’s monitor bounce rate and can block incoming emails if your bounce rate is too high. It’s important to be familiar with your particular ESP’s bounce rate policy. All the more reason to maintain a “clean” email list and keep those bounce rates low. Many companies aim for a bounce rate below 8% with a 2-5% rate being optimal.
Bounce rate is closely tied in with the overall health of your email list. Make sure your list hasn’t gone stale. An email list grows stale when you aren’t sending subscribers the emails that they signed up for. Subscribers may have changed or deleted the addresses they initially signed up with, which – as we previously mentioned – can cause those pesky bounces. Additionally, spam complaints and unsubscribes can be generated when people see emails they don’t remember signing up for or have forgotten about. This is something you definitely don’t want.
These charts from MailerMailer break down bounce rate by frequency and industry. In the first graph MailerMailer points out that mailing more frequently leads to a lower average bounce per send. Why? Because your email address and the campaigns you run with it are staying in your customer’s head/inbox. This allows them to recognize your emails while staying relevant. However, remember that there is a difference between sending to stay relevant and sending just to send. Make sure content is relevant to your customer.
The second graph looks at bounce rates per industry. We see that Family Services, IT Services and Science and Technology have the highest bounce rate. If your products fall in these categories you may want to make an extra effort to ensure that you are sending relevant content and keeping your customers engaged.
This metric measures the number of emails not rejected by the receiving mail server. Although emails that end up in the customer’s spam or junk folder are also considered “delivered,” this is still a good measure of how many bounced emails resulted. If you find yourself with a low delivery rate, chances are you have some bad apples lurking in your email list. You’ll also want to make sure that your ISP is automatically removing hard bounced emails, and if not you’ll need to remove those manually to keep your delivery rate where it should be. (You can test your Delivered Rate via Email Spam Test.)
How to improve delivery rate
• Remind subscribers to add you to their email list
- An option you have is to ask subscribers “to view all images and links, please add…” – a phrase that is commonly seen in many emails. Perhaps a good strategy will be to add this to the subscribe confirmation email you send to your subscribers.
• Use both images and text – as well as “alt” text in images as a fail-safe
- This provides a safety net if images don’t show up because of a subscriber’s email preferences.
While not a metric on its own, email reputation is extremely important to overall email channel health. So what is email reputation? Email reputation is the measurement of your email sending methods and your adherence to the guidelines established by ESP’s. Many marketers think of email reputation much like a credit score. Every sender has one, it takes time to build a good reputation much like good credit, and it can easily be tarnished by small mistakes.
Undelivered emails, spam traps and complaints are the most common ways senders gain negative email reputations.
If your sender score is low, chances are, ESP’s will apply more stringent filtering criteria to the emails and campaigns you send out. If your IP address has a poor reputation, it will make it that much harder to ensure your emails are making it into your customer’s inboxes.
Return Path reports that 83% of the time an email is not delivered to an inbox, it is due to a poor sender reputation. There are many websites out there that allow you to Check your sending reputation. Most are free, making it easier than ever to know where your reputation stands and if steps are needed to get back on the right track.
Inbox Placement Rate
Inbox Placement rate or IPR measures what percentage of sent emails actually end up in a recipient’s inbox. Remember that sent emails include blocked emails and emails sent to spam, so this metric is often considered more valuable than simply measuring sent emails. Unfortunately it’s not enough to simply know that your email has been delivered. IPR tells you how many emails are actually getting to a customer’s inbox, where they have the best chance of being opened and read.
The bad news is that in average 13% of permission based emails sent in the U.S. are still not delivered. Take a look at these awesome graphics from MarketingLand that break down global deliverability rates across countries and industries.
We see that Australia and Germany got the most emails into the inbox, while the U.S. is slightly above average with an IPR of 87%.
The Health and Beauty, Food and Beverage, Insurance, Apparel, and Automotive industries are the clear winners in this race, each with over a 91% IPR or above. Ironically, software and internet business performed the worst with just over a 40% IPR.
With inactive users, the lights are on but no one is home. Their email addresses are still valid but they are no longer interacting with your email messages. Your messages aren’t bounced, opened, unsubscribed, or even sent to spam complaint. This is not only frustrating, but can also be damaging the true picture of your campaign as a whole.
However, before you go and excommunicate any and all users who haven’t clicked or opened in the last six months, you should take a closer look at the past behaviours of these customers. You risk losing customers that may purchase sometime in the future.
It’s best to have a clear plan in dealing with these dormant users. Be careful how you define inactivity. Many marketers use cutoffs at 6, 9, and 12 months without any opens or clicks. But by doing this you aren’t getting the whole picture. Has there been no activity (email and on-site) since opt-in? How frequently are you sending emails? The less emails you send, the more time it will take for a user to qualify as inactive.
Make sure you separate the truly inactive users from those who may potentially purchase something in the future.
Also ask yourself why users are going (and staying) inactive. Usually we stop doing something because it no longer satisfies our needs or adds value to our lives. Before you slash a whole bunch of users from your list, make sure your campaign is where it should be. Think of all your efforts in getting these customers on your list in the first place. It takes seconds to remove an address from your list, and once these folks are gone, it’s usually a permanent separation.
The takeaway here is that inactive users still have the potential to be reactivated if you take the time and effort required to to do so. Attempt to reconnect with once active users.
Let them know they are sorely missed and offer them incentive to return.
Open & Click Reach
Open reach measures customer engagement. It is a measure of the percentage of your customers who have opened at least one email over a given time period. Open reach is a metric that stands out from the pack in that, rather than measuring campaigns, it looks at customer behavior as a whole. Open reach goes one step further than open rate. Keep in mind that ,a large portion of total revenue comes when customers who have never opened your email, open your email for the first time.
Converting non openers to first time openers is similar to converting inactives to actives. Email is all about ROI at every level.
Acquisition Source Metrics
Customer acquisition cost or CAC, as the name suggests, is the cost it takes make a customer actually buy a product or service . CAC is measured by taking all marketing costs for a given period and dividing by the number of customers that were acquired during this same period. For example if your marketing costs were $10,000 and you acquired 1000 customers during a given period, your CAC would be $10.00.
UTM (Urchin Tracking Modules) are a great way to keep track of where your visitors came from. Do they come from Twitter, Facebook, your snazzy new landing page, perhaps an email campaign you’ve been running. UTM’s are a map to know more about your customers.
Links that are usually UTM tagged are the most valuable – in comparison to the ones that your visitors can manually type. The reasons for this are obvious. They have a clear strategy with a clear objective. Your visitors will often not notice the difference in the length of a URL, but adding UTM parameters to your campaign allows you to know more about what is making a difference in your marketing efforts.
Google’s URL Builder Tool can help you properly tag your URL’s. it allows you to add up to 5 parameters to your URL
– Campaign Source (utm_source)
– Campaign Medium (utm_medium)
– Campaign Term (utm_term)
– Campaign Content (utm_content)
– Campaign Name (utm_campaign)
List Churn and list churn rate
Remember how we talked about growing your list rate? Well churn rate is list growth rate’s evil step sister that wants to destroy her at all costs. Churn rate is the number of subscribers who leave your list in any given time period. List churn swallows up to 30% of your email list every year. You need to make sure your growth rate is more than your churn rate. If not, you can build and build and build your list, but it won’t get any bigger. Sounds like a sisyphean nightmare right?
There are two types of churn:
Transparent/ voluntary churn – This includes unsubscribes, hard bounces and spam complaints. Your are not allowed to reach these users anymore. Move on.
Opaque/ involuntary churn – readers who ignore your emails. unengaged customers. Your emails are going into their spam and junk folders or they are piling up in an email address that rarely or ever gets checked.
How can I reduce churn rate?
• Reach out to customers who cancel a service
- This can include exit surveys and also seeking out these customers after the fact. While it may prove difficult to get a real live customer (who cancelled) on the phone, the wealth of information this interaction can provide you is invaluable to optimizing your campaign.
• Provide an alternative to the dreaded “unsubscribe”
- Allow recipients to “downgrade” the number of emails they receive from you rather than opt out completely. (“Too many emails? Click here to receive only monthly emails.”)
- Or, in a similar fashion, ask them to manage/update their email preferences at the unsubscribe page. Perhaps they just need to be able to tell you what they want/like and what doesn’t do it for them.
• Segment your customers
- Send more relevant content to subscribers based on behavior and preferences. Test segmentation’s by date of sign up, purchase history, and geographical location, to name a few.
• Be proactive
- Spot Red flag metrics. Identify customers who are on their way out before they actually opt out. Offer them something in return for their continued loyalty.
- Could you start sending them dedicated emails to win them over? Perhaps hitting them up at different levels of their CLV by using win-back campaigns, replenishment, etc.
Email Channel Success
What good is a fantastic email campaign if you can’t quantifiably measure its success? Opens and clicks alone won’t tell you the true success of a given campaign.
ROI- While there is no other metric that tells you exactly how much profit you are bringing in, ROI is notoriously hard to calculate. Often the “true cost” is difficult to define and varies from business to business, industry to industry.
However keep in mind that for eCommerce Email is consistently ranked as the best channel in terms of return on investment. The Direct Marketing Association reports that, on average, email has a 4300% ROI. Yep 43 times 100. Can you think of any other medium that can boast these mind blowing statistics? We don’t think so.
The days of simply measuring clicks and opens are over. There are now a wealth of metrics at our fingertips that can give us a more precise measure of the effectiveness of email marketing campaigns.
The value of an email is often determined by its success or failure in converting an open to a click, however customers are now hopping back and forth between channels to shop and make purchases. Even without a click, customers who see an email can take any number of actions.
- Searching for the brand and products.
- Talking about the brand/product in private communication and social media.
- Seeking out the brand’s website at a later time.
- Holding on to the email to click on later.
As the world of email marketing gets increasingly more complex, a firm grasp on your statistics and analytics can give you a better picture of the overall success of your campaign.